Finance
Negative amortization occurs when:
AThe borrower pays more than the required payment
BMonthly payments are less than the interest accruing, causing the loan balance to increase✓ Correct
CThe interest rate decreases while payments remain the same
DThe property value falls below the loan balance
Explanation
Negative amortization happens when payments don't cover the full interest due. The unpaid interest is added to the principal, causing the loan balance to grow over time.
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